Thursday, March 6, 2008

According to the newest real-estate tax statement I received yesterday, the price of my house dropped by $75K to $325K. My mortgage is still $342K.

I became part of the negative-equity group. The group that many financial industry experts are trying hard to persuade not to just walk away. I am not going to walk away because I realized I bought the house not for its investment value, but for its sentimental value. I love my house and am not planning to move in the short term.

Once someone attaches sentimental value on a house, it becomes a financial liability. It needs to be maintained and the mortgage paid. Therefore, it is not right for me to keep thinking of my house as an asset. It becomes an asset only if I manage to sell it and I have on my hands a stack of money in exchange.

Under this consideration, my net worth is a depressing -$228K and not $100K anymore. But I am happier this way because I am being more honest to myself.

NetWorth

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About Me

I am an early 30 years old software developer working in financial industry. I live and work in a Virginia suburb within Washington DC metro area with my wife, who is a corporate CPA. We journey through the world of personal finance together. I do the steering, and my wife do the managing.
Our interest in PF started in 2001 when our net-worth was $30K in credit card debt. We had to learn and apply fiscal discipline, have a strong determination and be willing to eschew instant gratification to dig our way out of the debt.
We have come a long way since, but we do not forget what we have learned and are eager to learn much more.